The Potential Effect of Brexit on Insurance Regulation in the UK

  • Julian Burling
Chapter

Abstract

How far will Solvency II and the IDD continue to form the substantive content of UK insurance regulation after Brexit? The stated preference of the UK government and of many UK insurers is for UK insurers and intermediaries to be able to continue to operate in the single European market with as close an approximation to the current passporting rights as can be negotiated. It is widely assumed that the retention of much of the substance of Solvency II in UK domestic legislation will be necessary to achieve this. The current “equivalence” provisions are not enough. Whether Solvency II-based capital requirements would continue to be appropriate for UK life insurers focused on North American or Asian markets and with no significant European business is a debated point.

Keywords

IDD IMD Brexit 

References

  1. Association of British Insurers (ABI). EU Exit: EU Legislation Mapping Exercise. Retrieved January 13, 2017, from https://www.abi.org.uk/~/media/Files/Documents/Publications/Public/2016/EU%20exit/EU%20legislation%20mapping.pdf
  2. Financial Conduct Authority. FCA letter to the House of Commons Treasury Committee 17 August 2017. Retrieved January 14, 2017, from https://www.parliament.uk/documents/commons-committees/treasury/Correspondence/AJB-to-Andrew-Tyrie-Passporting.PDF
  3. Financial Conduct Authority (FCA). Policy development update 24 January 2017. Retrieved January 26, 2017, from https://www.fca.org.uk/news/policy-development-update
  4. Financial Conduct Authority (FCA). Handbook. Insurance: Conduct of business sourcebook (ICOBS).Google Scholar
  5. Maddock, G.. “Authorising third country insurance firms: Has the commission got it wrong?” in Herbert Smith Freehills Financial Services Regulation and Corporate Crime Notes 25 August 2015. Retrieved January 15, 2017, from http://hsfnotes.com/fsrandcorpcrime/2015/08/25/authorising-third-country-insurance-firms-has-the-commission-got-it-wrong/
  6. Maddock, G., & Matthews, A. (Eds.). (2016). A practitioner’s guide to Solvency II. London: Sweet & Maxwell.Google Scholar
  7. Prudential Regulation Authority (PRA). Senior insurance managers regime: A new regulatory framework for individuals, November 2014. PRA CP 26/14. Retrieved January 15, 2017, from http://www.bankofengland.co.uk/pra/Documents/publications/cp/2014/cp2614.pdf

UK Government

  1. Jones, D. Minister of State (Department for Exiting the European Union) 15 December 2015. Reply to written PQ about date of TEU Article 50 notice. Retrieved January 13, 2017, from http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-12-08/56750/
  2. May, T. Prime Minister’s speech to Conservative party conference, 2 October 2016. Retrieved January 14, 2017, from http://www.conservativehome.com/parliament/2016/10/britain-after-brexit-a-vision-of-a-global-britain-theresa-mays-conservative-conference-speech-full-text.html
  3. May, T. Speech at Lancaster house, 17 January 2017. Retrieved January 25, 2017, from https://www.gov.uk/government/speeches/the-governments-negotiating-objectives-for-exiting-the-eu-pm-speech

UK Parliament

  1. EU Financial Affairs Sub-Committee. Report. Brexit: Financial services. 15 December 2016. Retrieved December 14, 2016, from http://www.publications.parliament.uk/pa/ld201617/ldselect/ldeucom/81/8102.htm. Evidence. Retrieved December 14, 2016, from http://www.parliament.uk/documents/lords-committees/eu-financial-affairs-subcommittee/Brexit-financial-services/Brexit-financial-services-evidence-volume.pdf
  2. House of Commons

    1. House of Commons Library briefing note. Legislating for Brexit: The Great Repeal Bill. Retrieved January 13, 2017, from http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7793

    Treasury Committee Inquiry into Solvency II

    1. Treasury Committee. Report. The economic and financial costs and benefits of the UK’s EU membership, 27 May 2016. Retrieved December 14, 2016, from http://www.publications.parliament.uk/pa/cm201617/cmselect/cmtreasy/122/12202.htm. Further evidence. Retrieved December 14, 2016, from http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/treasury-committee/the-economic-and-financial-costs-and-benefits-of-uks-eu-membership/oral/34669.html. Oral evidence: Follow up to the committee’s report on The UK’s future economic relationship with the European Union, HC 483, Tuesday 28 June 2016, Q23.

European Union

  1. European Commission. Commission Interpretative Communication—Freedom to provide services and the general good in the insurance sector Official Journal C 043, 16/02/2000 P. 0005–0027. Retrieved January 13, 2017, from http://publications.europa.eu/en/publication-detail/-/publication/7a36e3e8-de3f-4942-b18b-153817da3b8d/language-en
  2. European Commission. Expert group on banking, payments and insurance. Minutes of meeting on 14 July 2015. Retrieved January 15, 2017, from http://ec.europa.eu/finance/general-policy/docs/expert-group/150714-minutes_en.pdf

Legislation

    United Kingdom

    1. Financial Services and Markets Act 2000.Google Scholar
    2. Financial Services and Markets. Act 2000 (Regulated Activities) (Amendment)(No. 2) Order 2003 SI 2003/1476.Google Scholar
    3. Financial Services and Markets Act 2000. (Regulated Activities) Order 2001 SI 2001/544.Google Scholar
    4. Insurers (Reorganisation and Winding-Up) (Lloyd’s). Regulations SI 2005/1998.Google Scholar
    5. Insurers (Reorganisation and Winding-Up) Regulations 2004. SI 2004/353.Google Scholar

    European Union

    1. Commission Delegated Regulation. (Delegated Regulation (EU) 2015/35).Google Scholar
    2. Commission Packaged Retail and Insurance-based Investment Products (PRIIPs). Regulation (EU) No 1286/2014.Google Scholar
    3. Distance Selling of Financial Services Directive. (2002/65/EC).Google Scholar
    4. E-Commerce Directive. (2000/31/EC).Google Scholar
    5. Insurance Distribution Directive (EU). 216/97 (IDD).Google Scholar
    6. Insurance Mediation Directive. 2002/92/EC (IMD).Google Scholar
    7. Solvency II Directive. 2009/138/EC.Google Scholar

Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Julian Burling
    • 1
  1. 1.Serle Court Chambers, Lincoln’s InnLondonUK

Personalised recommendations